INCOME TAX ACT, 1961

Section 68

Income from undisclosed sources - Addition under section 68 - Receipt of unsecured loan - Assessee proved genuineness identity and creditworthiness--AO made addition relying on third party statement recorded by investigation wing

AO received information from investigation wing as to assessee being one of the beneficiaries to entries provided by Gautam Jain & Ors. as they had confessed in search proceedings. Accordingly, AO treated loan amount received by assessee as unexplained credit under section 68 and made addition. Held: Assessee by furnishing loan confirmations, financials, bank statements, copies of ITR of all the creditors discharged her onus to prove identity, and creditworthiness of loan creditors and genuineness of loan transactions. AO merely relying on statement of third party whose statement was not even provided to assessee treated creditors as non-genuine without making any sort of enquiries. In such situation, addition made under section 68 could not be upheld.

Relied:Khandelwal Constructions v. CIT (1997) 227 ITR 900 (Gau.) : 1997 TaxPub(DT) 0701 (Gau-HC), Dy. CIT v. Rohini Builders (2002) 256 ITR 360 (Guj) : 2002 TaxPub(DT) 0305 (Guj-HC), Namichand Kothari v. CIT (2003) 264 ITR 254 (Gauhati HC) : 2003 TaxPub(DT) 1401 (Gau-HC), Andaman Timber Industries in (Civil Appeal No. 4228 of 2006) (SC) : 2015 TaxPub(DT) 5186 (SC) and H.R. Mehta v. ACIT ITA No. 5 8 of 2001 in the judgment delivered on 30-6-2016 : (2016) 387 ITR 561 (Bom HC) : 2016 TaxPub(DT) 3524 (Bom-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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